Trophectoderm (TE) is the first cell type that emerges during development and plays pivotal roles in the viviparous mode of reproduction in placental mammals. TE adopts typical epithelium morphology to surround a fluid-filled cavity, whose expansion is critical for hatching and efficient interaction with the uterine endometrium for implantation. TE also differentiates into trophoblast cells to construct the placenta. This chapter is an overview of the cellular and molecular mechanisms that control the critical aspects of TE formation, namely, the formation of the blastocyst cavity, the expression of key transcription factors, and the roles of cell polarity in the specification of the TE lineage. Current gaps in our knowledge and challenging issues are also discussed that should be addressed in future investigations in order to further advance our understanding of the mechanisms of TE formation.